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Japan vows to closely watch economic data and market conditions
Finance Minister Satsuki Katayama said monetary and market actions depend on the Bank of Japan and that Japan is working to accelerate talks on broadening JGB offerings to households.
Japan’s Finance Minister Satsuki Katayama said the government will closely track economic indicators and market conditions, aiming to maintain fiscal sustainability and secure market confidence, according to FXStreet.
Katayama did not comment on specific bond yield levels, but noted that Japan’s monetary tools depend on the Bank of Japan. She also said the BoJ can adjust monetary policy regardless of the government’s view, as Japan pursues active fiscal policy and expects gradual interest rate rises.
The yen’s value is influenced by Japan’s economic performance, BoJ policy, the differential between Japanese and US bond yields, and risk sentiment. FXStreet noted that the BoJ has a currency control mandate and has intervened in currency markets at times, though it generally refrains due to political concerns with major trading partners.
FXStreet added that the BoJ’s ultra-loose policy from 2013 to 2024 weighed on the yen, but the more recent unwinding has provided some support. The narrowing gap between Japanese and US yields is also expected to reduce earlier forces that favored the US dollar versus the Japanese yen, while the yen is often viewed as a safe haven in market stress.